The European Commission has suspended a proposal by the German Telecoms Regulator (BNetzA) to set fixed termination rates for alternative operators. The termination rates proposed by Germany are three times higher than the average of countries which follow the recommended approach set out in EU telecom rules. Termination rates are the charges telecoms operators charge each other to terminate a call in their respective networks. Each operator has market power over access to customers on its own network. These costs are ultimately passed on to consumers and businesses.

European Commission Vice President Neelie Kroes stated: "It is important for building up a real single market that both operators and consumers face termination rates in Germany that are in line with those in other EU Member States."

Under BNetzA's proposal, the fixed termination rates that German alternative operators would be allowed to charge range from €0.0036€/minute (peak) to €0.0025€/minute (off-peak). These figures correspond to the termination rates BNetzA proposed for Deutsche Telekom early this year. Deutsche Telekom's termination rates were also suspended by the Commission in March since they did not reflect the price of the provision of an efficient termination service. BEREC (the Body of European Regulators for Electronic Communications) fully supports the Commission's line on this issue.

This is the second time this year that the Commission has disagreed withGermany on implementation of fixed termination rates under Article 7a of the Telecoms Directive (IP/13/311). BNetzA, BEREC and the Commission are currently discussing the way forward with respect to fixed termination rates for Deutsche Telekom.

Following the "serious doubts" letter sent by the Commission today, BNetzA has three months to work with the Commission and BEREC on a solution to this case. In the meantime implementation of the proposal is suspended.

Background

In the second half of May 2013, BNetzA notified the Commission of its plans to regulate fixed termination markets for alternative operators based on a calculation method different to that set out in the Commission's 2009 Recommendation on Termination Rates (see IP/09/710 and MEMO/09/222)

"Article 7" of the Telecoms Framework Directive requires national telecoms regulators to notify the Commission, BEREC and telecoms regulators in other EU countries, of measures that they plan to introduce to address the lack of effective competition in the markets in question.

The new rules enable the Commission to adopt further harmonisation measures in the form of recommendations or (binding) decisions if divergences in the regulatory approaches of national regulators, including remedies, persist across the EU in the longer term.

Useful Links

The Commission's letter sent to the German regulator will be published at: